Does Your Personal Auto Insurance Cover Work-Related Driving?

If you use your personal vehicle for work-related driving, your personal auto insurance may not cover you in the event of an accident. This is because personal auto insurance policies are designed to cover the risks associated with everyday driving, such as commuting and running errands. Using your car for work purposes, such as deliveries or client visits, involves different risks that may not be covered by your personal insurance policy. These risks include increased mileage, transporting goods and clients, and pressure to meet deadlines, all of which can lead to a higher likelihood of accidents. Therefore, if you regularly use your personal vehicle for work, it is important to consider purchasing a commercial auto insurance policy or adding an endorsement to your personal policy to cover business use.

One-time work errands

If you need to use your personal vehicle for a one-time work errand, it's important to understand how your insurance policy works in this situation. While it may vary depending on your insurance provider and location, here's what you need to know about coverage for one-time work errands:

Inform Your Insurance Company

Firstly, it is crucial to advise your insurance company before using your personal vehicle for any work-related purpose, even if it's just a one-time errand. Failure to do so could result in your insurance company refusing to cover any damages or claims arising from that trip. Being transparent with your insurance provider is always the best policy.

Understand the Risks

Insurance companies view business drivers as posing a greater risk than personal drivers. This is because people who drive for work are generally on the road more often and are, therefore, more likely to be involved in an accident. As a result, vehicles used for business purposes typically cost more to insure.

Assess the Frequency of Work Use

The frequency with which you use your personal vehicle for work errands is an important factor. If it's truly a one-time occurrence, your personal auto insurance may be sufficient. However, if you find yourself using your car for work errands more frequently, even if it's just a few times a year, you may need to consider additional coverage.

Understand "Business Use"

"Business use" typically includes a wide range of activities, such as transporting supplies or equipment, clients or employees, visiting multiple worksites, going to the bank for business, taking work calls while driving, and out-of-town business trips. If your one-time work errand falls under any of these categories, it is considered business use, and you may need to look into additional insurance options.

Explore Hired and Non-Owned Auto Insurance (HNOA)

If you're an employee using your personal vehicle for work errands, your employer should have HNOA insurance. HNOA covers liability in the event of an accident while driving your personal vehicle, a rental car, or a leased vehicle for work purposes. However, it's important to note that HNOA does not cover damage to the vehicle you are driving or your medical expenses if you are injured in the accident.

In summary, while your personal auto insurance may cover a one-time work errand, it's important to be transparent with your insurance provider, understand the risks and frequency of work use, and explore additional insurance options if necessary.

More frequent work errands

If you use your personal vehicle for work-related tasks, your personal auto insurance policy will not cover you, and you will need to get a commercial car insurance policy. This is because personal policies are designed to cover the risks associated with everyday driving, such as commuting to work or running errands. However, using your car for work purposes comes with different risks that personal insurance does not typically cover.

Business drivers are considered higher-risk than personal drivers because they are on the road more often and tend to drive longer distances. They may also face pressure to meet deadlines, which can lead to more aggressive driving behaviours. As such, insurance companies view business drivers as greater risks for accidents. Even one accident while driving for work purposes can cost your business thousands of dollars.

If you only use your personal vehicle for work errands occasionally, your personal insurance carrier may be able to tailor your policy to accommodate this. However, if you use your personal vehicle for work purposes on a regular basis, you should consider adding commercial auto insurance or hired and non-owned auto insurance (HNOA). HNOA is a special type of liability insurance that covers vehicles used for business that are not owned by the policyholder, including rental cars, leased cars, and personal vehicles used for company tasks. It covers third-party liabilities such as damage to other people's cars and property, medical bills for injured parties, and legal fees if the company is sued due to an accident.

It is important to note that if you use your personal vehicle for commercial purposes without the proper insurance, you may be considered an uninsured motorist. In the event of an accident, you may have to pay a significant amount out of pocket, and your personal auto policy will be useless. Therefore, it is crucial to have the appropriate insurance coverage in place before using your personal vehicle for work-related tasks.

Commercial use of a personal vehicle

If you use your personal vehicle for commercial purposes, it's important to understand how your auto insurance provider defines commercial use. This is because your personal auto insurance policy may not cover damages from accidents that occur while you or your employees are using your personal vehicles for work.

• Picking up or delivering goods
• Providing a service for a fee
• Travelling to a remote work location or between work locations
• Visiting client locations
• Transporting people or goods for a fee
• Transporting work tools and equipment

If you use your personal vehicle for business reasons only occasionally, it may be covered under your personal policy. However, it's important to review your policy exclusions regarding business use and inform your insurance provider of any changes in how you use your vehicle. If business use is excluded, you may need to purchase an endorsement that allows business use of your vehicle. This type of endorsement can be costly, and not all insurance companies will offer protection for limited business use.

Another option to consider is adding hired and non-owned auto insurance (HNOA) coverage to your policy. HNOA covers the costs of a lawsuit over an accident you or your employee caused while driving a personal, rented, or leased vehicle on business. This includes employees who use their own cars to run work-related errands or rent cars for business trips. HNOA typically supplements any coverage from a personal auto policy and covers third-party liability costs such as damage to another vehicle, other property damage, and bodily injury to other parties involved in the accident.

In summary, if you use your personal vehicle for commercial purposes, it's important to review your insurance policy and exclusions, inform your insurance provider of any changes in usage, and consider purchasing additional coverage such as an endorsement for business use or HNOA. This will help ensure that you have the necessary protection in the event of an accident while using your personal vehicle for commercial purposes.

Commercial auto insurance

Various types of businesses are eligible for commercial vehicle insurance, including transportation and delivery services, construction companies, retail businesses with delivery vehicles, and professional services that require vehicles for operations.

If you or your employees use your personal vehicles for work purposes, such as business errands, deliveries, or client meetings, you may need hired and non-owned auto insurance (HNOA) in addition to commercial auto insurance. HNOA covers the costs of a lawsuit over an accident caused by an employee driving a personal, rented, or leased vehicle on business.

Overall, commercial auto insurance is essential for businesses that rely on vehicles for their operations, providing coverage for vehicle damage, medical expenses, and liability claims.

Hired and non-owned auto insurance (HNOA)

HNOA covers the costs of a lawsuit arising from an accident caused by an employee driving a personal, rented, or leased vehicle for business purposes. This includes employees who use their own cars to run work-related errands or rent cars for business trips. It covers damage to another vehicle, third-party property damage, and bodily injury to other parties involved in the accident.

HNOA is typically not available as a standalone policy. It can be added to a business's general liability insurance or the general liability portion of a business owner's policy. It can also be purchased separately through an insurance agent, but buying it together with other policies can lower insurance rates.

HNOA is particularly relevant for businesses that frequently rent cars for business travel, lease vehicles for extended periods, or ask employees to use their personal vehicles for work errands or during peak work periods. It is also important for businesses that rent or borrow vehicles to do work, or whose employees use their personal vehicles for business.

HNOA does not cover damage to the leased, rented, or employee-owned vehicle, accidents during commutes to work, or incidents that occur while employees are running personal errands during the workday.

Frequently asked questions